Home > Debt Consolidation >
Debt Consolidation Programs > Lottery: Not A Sensible Debt Consolidation Program
Lottery: Not A Sensible Debt Consolidation Program |
|
There have been instances where people have gone in for debt consolidation programs thinking that it is like a lottery ticket for them to get rid of their debts. But, there is a difference between winning a lottery and going in for a debt consolidation program. There are many things that are associated with a debt consolidation program. Just one monthly payment at a lower interest rate that is much lower than what you had been paying all the time. This is when debt consolidation is seen as a great solution to get rid of your debts and save on your monthly payments that were made at different points of time in a month. The process of debt consolidation is when all your credit cards and loan debts are combined in one and paid off with the help of a huge loan. This sounds like a great idea to get rid of all your debts once and for all. Of course, rather than making any payments against your earlier debts, you are just supposed to make payments toward that one big loan that you used to get your debts consolidated. One can't call winning a lottery a practical debt consolidation program. Most people look at debt consolidation as good as winning a lottery, after which you can use up the amount to pay off all your debts and remain debt free all your life. If you are looking toward getting rid of your debts, then, you should start that from your end. Start by spending less on not-so-important goods. Use less of your credit cards and be in touch with your creditors constantly. The very first thing that you need to do is to look for a good debt consolidation program, or service. There is one thing that you need to remember in this regard; low interest rates do not solve the problem of your debt. You need to work out a program that can gradually help you solve your problem of debt; for example, you can develop a repayment plan that can pay off your debt consolidation loan within five years. Let us discuss why a debt consolidation loan with low interest rates is not as good as it sounds. There is a catch with the low interest rate debt consolidation loans. The principal repayments get extended in case of the low interest rates. If you are paying 7%, 8%, or, 9% toward your debt consolidation loan, then about half of the percentage amount goes toward paying off the principal amount, thus the loan gets paid off faster. Whereas, in the case of a low interest rate loan like 4% or 5%, the amount that goes toward the principal is just 1% or 2% of the total annual percentage rate. This is why the term of the loan gets extended, and why debt consolidation loans with the lowest interest rates are not always considered to be the best. The example given above proves that it is more practical to go in for a debt consolidation loan with a slightly higher interest rate, than for the one that has a lower interest rate in case you wish to get rid of your loan debt faster. There are all kinds of private lenders and other financial institutions that deal in debt consolidation loans and counseling. Credit card debt consolidation is seen as a viable option to consolidate all your credit card debts under one credit card. In this way, you will have to make payments for just one credit card rather than paying off different credit cards as and when they are due in a month. This is good for people who have a good credit rating. They can then secure a good interest rate on their credit card debt consolidation. A home equity loan can also act as a good debt consolidation loan. The loan is secured against your home and is given to you on the basis of the equity that you have on the loan. There are many ways that you can get your debts consolidated and paid off within a short period of time. |
|
| ------------------------ |
|---|
|
|
| ------------------------ |
|---|
|
|
|
|
| ------------------------ |
|---|
|
| ------------------------ |
|---|
Custom Search
|
| ------------------------ |
|---|
|
|
| ------------------------ |
|---|
Consumer Alerts | About | Bookmark Us | Contact | Espanol | Privacy Statement | Copyright | Terms & Conditions | Financial Widgets | SiteMap
Copyright © 2006 Credit Loan, LLC. 235 APOLLO BEACH BLVD, STE 218 Apollo Beach, Florida 33572 All rights reserved.
Disclaimer: The content provided on CreditLoan.com is for informational purposes only; do not make any financial decisions based on its content. Financial decisions are personal, based on an individual's situation. Consult with a financial professional before making any financial decisions. CreditLoan.com is not liable for your financial actions.
